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Chinese Economy Surprises w/Strong Q119
April 22, 2019

For several months, we have been reporting on the changing (slowing) nature of the Chinese economy but the PRC surprised last week, by reporting first-quarter economic growth that was higher than expected, growing 6.4%, flat sequentially and Y/Y. A slowdown had been expected as annual forecasts were lowered last quarter. Industrial production and retail sales were both 9% higherY/Y, helped by government measures including tax cuts designed to boost sales. Cynical analysts argue that China, in the throes of trade negotiations with the US hasn’t actually done that much for some parts of the Chinese economy – yet. As one of the world’s biggest spenders, a stronger China would benefit overseas companies throughout 2019. Anecdotally, cosmetics giant L’Oréal attributed its first-quarter sales growth to robust Chinese demand. Japan’s Nippon Paint on Wednesday agreed to buy Australia’s DuluxGroup for $3 billion, in part to diversify its business away from an unpredictable Chinese market. European car sales declined in March for the seventh month in a row, while China’s auto sales fell 11% last quarter, and its government is still mulling over the merits of a plan to reignite demand. From: Finimize